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Manila Electric Company (MAEOY)
OTHER OTC:MAEOY
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Manila Electric Company
(OTC:MAEOY)
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Rating:64Neutral
Price Target:
$22.50
â–²(12.73% Upside)
Action:DowngradedDate:03/08/26
The score is primarily constrained by fundamentals: negative and weakening free cash flow and higher leverage reduce financial flexibility despite solid profitability. Valuation is a key positive (low P/E and strong dividend yield), and the earnings call tone was constructive with strong segment growth, while technical signals appear neutral-to-mixed.
Positive Factors
High Return on Equity
Sustained ROE near 30% indicates strong profitability from its regulated distribution franchise. High returns reflect pricing pass-through, operating leverage and stable demand in Metro Manila, supporting ongoing reinvestment capacity and shareholder distributions over the medium term.
Power Generation Growth & Diversification
Rapid expansion of the generation business (now ~37% of CCNI) and gains in LNG and renewables diversify earnings away from pure distribution pass-throughs, deepen vertical integration, improve margin mix, and reduce exposure to single-segment shocks long term.
Operational Reliability & Long-term Capex
Large, targeted capex into solar and distribution networks and measurable reliability gains lower technical losses and outage costs, strengthen regulatory standing, and increase network efficiency — durable improvements that enhance service quality and cost structure.
Negative Factors
Negative Free Cash Flow
Persistent negative free cash flow despite solid net income signals heavy capex and/or working capital strain. This undermines internal funding for dividends, debt reduction or reinvestment, increasing reliance on external financing over the medium term.
Rising Leverage
A sharp increase in leverage reduces financial flexibility and raises refinancing and interest-rate sensitivity. With negative FCF, higher debt amplifies solvency and cost-of-capital risks and constrains strategic choices during adverse cycles.
Regulatory & Fuel Procurement Uncertainty
Regulatory fee resets that cut distribution revenue and policy shifts prioritizing indigenous gas create structural earnings and procurement uncertainty. These can raise future fuel costs, compress margins, and limit tariff-setting flexibility over several quarters.
Manila Electric Company (MAEOY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.66B
Dividend Yield4.82%
Average Volume (3M)0.00
Price to Earnings (P/E)11.1
Beta (1Y)0.26
Revenue Growth4.05%
EPS Growth11.89%
CountryUS
Employees5,815
SectorUtilities
Sector Strength65
IndustryRegulated Electric
Share Statistics
EPS (TTM)0.43
Shares Outstanding563,546,260
10 Day Avg. Volume0
30 Day Avg. Volume0
Financial Highlights & Ratios
PEG Ratio0.79
Price to Book (P/B)3.36
Price to Sales (P/S)1.14
P/FCF Ratio-18.23
Enterprise Value/Market Cap59.11
Enterprise Value/Revenue1.41
Enterprise Value/Gross Profit7.11
Enterprise Value/Ebitda8.60
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Manila Electric Company Business Overview & Revenue Model
Company DescriptionManila Electric Company holds a congressional franchise to construct, operate, and maintain an electric distribution system in the Philippines. The company operates through two segments, Power and Other Services. It offers power to approximately 7.3 million industrial, commercial, and residential customers in 36 cities and 75 municipalities, including Metro Manila, and the provinces of Rizal, Cavite, and Bulacan, as well as parts of the provinces of Pampanga, Batangas, Laguna, and Quezon; distributes power to customers in Clark Special Economic Zone; and develops, finances, constructs, and operates solar-powered generation facilities, as well as owns coal and diesel-fired, and liquefied natural gas power plants. The company also provides electromechanical engineering, construction, consulting, and related manpower services; rail-related operations and maintenance services; insurance and re-insurance services; e-business development; power distribution management; and electric vehicle and charging infrastructure solutions. In addition, it offers engineering, procurement, and construction services; testing and commissioning services; and building and facilities management services. Further, the company provides e-transaction, outsourced payment collection, outsourced tellering, and other administrative services; energy efficiency and urban services, as well as engages in the energy sourcing and trading, and wholesale contracting and aggregating of electricity. Manila Electric Company was founded in 1903 and is based in Pasig, the Philippines.
How the Company Makes MoneyMAEOY primarily generates revenue through the sale of electricity to residential, commercial, and industrial customers. The company purchases electricity from power generation companies and then sells it to end-users at regulated rates determined by the Energy Regulatory Commission (ERC). Key revenue streams include the basic electricity charge, which covers generation, transmission, and distribution costs, as well as ancillary services. Additionally, MAEOY earns from various fees, including connection fees and service charges. The company's revenue is supported by strategic partnerships with generation companies and participation in the wholesale electricity spot market, allowing it to optimize procurement and pricing strategies. Factors contributing to its earnings include regulatory frameworks, demand growth in its service areas, and initiatives aimed at improving operational efficiency and customer service.
Manila Electric Company Earnings Call Summary
Earnings Call Date:Nov 03, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:May 04, 2026
Earnings Call Sentiment Positive
Meralco's earnings call presented a strong financial performance with significant growth in power generation and improvements in operational reliability. However, challenges such as a slight decline in energy sales and regulatory adjustments were noted. The company's sustainability efforts and safety records were highlighted positively.Q3-2025 Updates
Positive Updates
Strong Financial Performance
Meralco reported a 14% increase in consolidated core net income (CCNI) to PHP 40 billion for the first nine months of 2025. The power generation segment grew by 63%, contributing PHP 14.7 billion to CCNI.
Power Generation Success
The LNG business contributed PHP 10.9 billion with significant energy outputs from Chromite Gas and PacificLight. MGen's renewables delivered 557-gigawatt hours, up 15% driven by new solar plants.
Operational Reliability
Meralco achieved a 0.26 percentage point improvement in system loss, and SAIFI and SAIDI showed significant improvements, indicating fewer and shorter power interruptions.
Recognition in Sustainability
Meralco was included in the FTSE4Good Index for the fifth consecutive year and improved its Bloomberg Gender Equality score from 4.1 to 4.6.
MGen's Growth and Safety
MGen achieved over 65 million safe man-hours and reported a 75% increase in total energy delivered compared to the previous year.
Negative Updates
Slight Decline in Energy Sales
Energy sales dropped by 0.4% to 40,719 gigawatt hours due to cooler weather and high vacancies in office and condo spaces from the POGO exit.
Impact of Unfavorable Weather
The energy sales decline was further impacted by cooler temperatures and typhoon disruptions, resulting in increased government and class suspensions.
Distribution Revenue Decrease
Distribution revenue decreased due to regulatory reset fee adjustments starting February 2025.
Challenges with Indigenous Gas Prioritization
Uncertainty surrounds the impact of DOE's circular on prioritizing indigenous natural gas over imported LNG, affecting future procurement strategies.
Company Guidance
In the third quarter and nine-month results briefing for 2025, Meralco reported a fiscal performance characterized by robust growth in its power generation business, which contributed PHP 14.7 billion to the consolidated core net income (CCNI), a substantial 63% increase from the previous year. This sector now constitutes 37% of the CCNI. The distribution utility (DU) business remained the largest contributor, accounting for 55% of the PHP 40 billion CCNI, with an 8% growth to PHP 21.9 billion. The consolidated reported net income rose by 9% to PHP 36.8 billion, while consolidated revenues saw a 5% increase to PHP 371.8 billion, driven by higher pass-through generation and transmission charges. Capital expenditures totaled PHP 78.8 billion, primarily for solar power plant developments and distribution network improvements. Despite a slight decline in energy sales due to cooler weather and increased vacancies in office spaces, Meralco managed a 14% rise in core EBITDA to PHP 67.2 billion, indicating a strong operational performance across its business segments.Manila Electric Company Financial Statement Overview
Summary
Profitability and revenue growth are solid (steady top-line growth and ~10% net margin), but the overall financial picture is weighed down by weak cash generation: free cash flow is negative in 2024–2025 and worsened in 2025. Balance-sheet risk also increased as leverage rose sharply (debt-to-equity ~1.33 in 2025 vs ~0.65 in 2024), reducing flexibility despite strong ROE.Income Statement
Revenue has been growing steadily in the last two years (2024: ~6.0%, 2025: ~4.0%), and profitability is solid with net margin holding around ~10% in 2024–2025. However, margins weakened in 2025 versus 2024 (gross, EBIT, and EBITDA margins all down), indicating cost pressure and less efficient conversion of sales into profit despite higher earnings.74
Positive
Balance Sheet
Profitability on shareholder capital is strong (return on equity roughly ~30%+ in 2023–2025), consistent with a stable regulated utility profile. The main concern is leverage: debt-to-equity increased meaningfully to ~1.33 in 2025 from ~0.65 in 2024, reducing balance-sheet flexibility and increasing sensitivity to refinancing and interest-rate conditions.63
Positive
Cash Flow
Operating cash flow improved sharply in 2025, but free cash flow is negative in both 2024 and 2025 and deteriorated further in 2025, implying elevated capital spending and/or working-capital drag. Cash generation also does not closely track reported earnings recently, with free cash flow running below (and in 2024–2025, negative versus) net income—raising questions about near-term cash coverage for dividends, debt reduction, or reinvestment without added borrowing.41
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 488.87B | 508.52B | 470.36B | 443.61B | 7.82B | 6.46B |
| Gross Profit | 96.91B | 57.51B | 99.12B | 86.07B | 641.84M | 922.68M |
| EBITDA | 80.12B | 66.98B | 79.52B | 67.77B | 771.13M | 52.01B |
| Net Income | 48.93B | 52.28B | 45.86B | 38.02B | 521.47M | 476.68M |
Balance Sheet | ||||||
| Total Assets | 791.69B | 823.47B | 617.96B | 586.04B | 9.32B | 9.48B |
| Cash, Cash Equivalents and Short-Term Investments | 89.72B | 109.40B | 93.31B | 90.49B | 1.32B | 1.42B |
| Total Debt | 212.06B | 230.11B | 93.42B | 100.66B | 1.86B | 1.78B |
| Total Liabilities | 569.37B | 600.05B | 432.08B | 418.72B | 7.09B | 7.42B |
| Stockholders Equity | 165.56B | 173.05B | 144.60B | 122.30B | 1.97B | 1.87B |
Cash Flow | ||||||
| Free Cash Flow | -53.23B | -31.90B | -2.50B | 29.04B | -205.11M | 399.48M |
| Operating Cash Flow | 44.96B | 77.02B | 42.01B | 57.97B | 568.83M | 951.99M |
| Investing Cash Flow | -125.79B | -157.93B | -18.76B | 1.57B | -516.26M | -1.08B |
| Financing Cash Flow | 103.53B | 106.93B | -21.59B | -32.60B | -37.38M | 224.69M |
Manila Electric Company Technical Analysis
Negative
19.96
Price Trends
20.36
Negative
20.05
Negative
19.44
Positive
Market Momentum
0.10
Positive
38.63
Neutral
15.91
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MAEOY, the sentiment is Negative. The current price of 19.96 is below the 20-day moving average (MA) of 21.01, below the 50-day MA of 20.36, and above the 200-day MA of 19.44, indicating a neutral trend. The MACD of 0.10 indicates Positive momentum. The RSI at 38.63 is Neutral, neither overbought nor oversold. The STOCH value of 15.91 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MAEOY.
Manila Electric Company Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $19.20B | 19.53 | 8.47% | 3.72% | 0.11% | -0.52% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
65 Neutral | $12.39B | 17.22 | 8.91% | 4.15% | 5.70% | -8.25% | |
64 Neutral | $11.66B | 11.12 | 32.73% | 4.82% | 4.05% | 11.89% | |
64 Neutral | $9.94B | 31.15 | 9.89% | 3.82% | 18.03% | 29.46% |
* Utilities Sector Average
MAEOY
Manila Electric Company
19.83
2.84
16.71%
OGE
OGE Energy
47.93
5.34
12.54%
PNW
Pinnacle West Capital
101.28
12.73
14.38%
EVRG
Evergy
83.13
19.91
31.49%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.